Gateley has made its first acquisition since floating on AIM last year, purchasing tax advisory business Capitus for £2.72m.
The deal comprised a cash payment of £1.59m as well as the issuance of more than one million ordinary shares in Gateley. Based on the closing share price on 8 April the shares are valued at £1.13m.
Capitus advises investors on commercial property transactions. During the 2014/15 financial year Capitus turned over £1.38m and generated a profit of £593,000. The business is led by co-founders Kevin Meyer and Aubrey Calderwood.
The business will now be known as Gateley Capitus and operate as a wholly owned subsidiary of Gateley Plc. An operating board made up of senior management from both Gateley and Capitus will oversee the business.
Gateley CEO Michael Ward said that the acquisition was in line with the growth strategy it outlined when it became the first UK law firm to float on AIM. Ward added the acquisition would present a number of “cross referral opportunities”.
At the time of Gateley’s flotation Ward said the funds gained from the floatation would be used to acquire legal firms offering specialist services or the opportunity to expand geographically. Capitus has offices in London, the Midlands, Northern Ireland and the Republic of Ireland.
The listing allowed Gateley to raise £30m and valued the firm at £100m. Although, the firm raised a substantial sum £25m was raised for the selling shareholders while only £5m went to the firm.
In September Gateley announced it increased its pre-tax profits by £32.4 per cent, from £7.4m to £9.8m.
In response to the acquisition Gateley’s share price rose 3 per cent from 100.5p to 103.5p.